The .Com Bubble King Is Back

Cisco $CSCO just gave investors the kind of earnings reaction that can change how the market sees a stock.

And we're not just talking about for a few days... CSCO could be in a new uptrend that lasts for years.

The old .com king has finally resolved a 26-year range, and is doing it on the back of its best earnings reaction since 2011.

That matters because Cisco has been one of the great “what could have been” stocks for an entire generation.

From 1994 to 2000, CSCO rallied roughly 7,800% in a near-vertical line. It was one of the defining winners of the .com bubble. 

Then the bubble popped, the stock collapsed, and the stock spent the next 26 years trying to repair the damage.

26 years is a long time to go nowhere...

Long enough for the buyers from 2000 to look wrong for almost their entire investing careers.

Now CSCO is finally clearing that old peak.

Structurally, this appears to be the beginning of a brand-new primary uptrend, which could carry CSCO significantly higher over the coming years.

That was the technical setup we highlighted in Sunday’s Weekly Beat.

The chart looked phenomenal, and the only problem was earnings sentiment.

Last quarter, CSCO fell more than 12% for its worst earnings reaction since May 2022. In other words, the long-term chart was screaming higher, but the market still needed proof that the fundamental story could support the breakout.

And yesterday, the company delivered that proof.

Cisco crushed the headline expectations across the board and came in above the high end of management’s guidance range. 

Total product orders grew 35% YoY, and even excluding hyperscaler orders, they grew 19% YoY. 

Networking product orders accelerated more than 50%, marking the 7th consecutive quarter of double-digit growth across Cisco’s networking portfolio.

Overall, it was an amazing quarter, but the AI numbers are what really changed the story.

Cisco took $1.9 billion of AI infrastructure orders from hyperscalers during the quarter, bringing the year-to-date total to $5.3 billion. That already surpassed management’s prior full-year expectation of $5 billion, with a full quarter remaining. 

As a result, Cisco raised its fiscal 2026 hyperscaler AI order expectation to roughly $9 billion and raised expected AI infrastructure revenue from hyperscalers to roughly $4 billion.

In other words, this is not your grandfather’s Cisco.

The company is also seeing momentum beyond hyperscalers... 

Cisco took approximately $300 million of AI infrastructure orders from neocloud, sovereign, and enterprise customers in Q3, bringing the year-to-date total to about $900 million. 

That matters because the AI infrastructure story is no longer limited to the mega-cap hyperscalers. Enterprises, sovereign AI projects, neoclouds, and corporate network modernization are becoming part of the next wave.

Cisco is trying to become the trusted backbone of that buildout, and they seem to be doing a pretty damn good job.

And CSCO shareholders are being rewarded as the market starts to reprice it as a critical infrastructure provider for the AI era.

This is why we expect CSCO to be a leader in the AI trade for the foreseeable future.

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Thank you for reading, 

-The Beat Team